Plan has been terminated 3/31/09. 2009 val date is 1/1/09. The only participant is the owner. 2009 val results are as follows:

TNC = $0
Shortfall Amortization Payment = $10,000
Carryover Balance = $5,000

I think that I can recognize the plan termination amendment made in Feb. '09 and prorate the charges. Agreed?

Assuming I can prorate, is the correct result:
1. ($10,000 - $5,000) x 3/12 = $1,250, or
2. $10,000 x 3/12 - $5,000 = $0

There is some question about whether or not 77-2 applies a la the proposed funding reg. In the case of a freeze or short plan year, it is believed yes.

Under this assumption, (2) appears appropriate (since otherwise you're prorating the FSCOB).

Thanks. That was my thought.